consolidated financial statements and other information

Transcription

CONSOLIDATED FINANCIAL STATEMENTS AND OTHER INFORMATION
INDIANA UNIVERSITY HEALTH, INC. AND SUBSIDIARIES
AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
TABLE OF CONTENTS
Page
Management’s Discussion of Financial Performance
1
Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations and Changes in Net Assets
Consolidated Statements of Cash Flows
10
12
14
Other Information
Special Purpose Combined Balance Sheets – Obligated Group and
Affiliates
Special Purpose Combined Statements of Operations – Obligated
Group and Affiliates
Special Purpose Combined Balance Sheets – Obligated Group
Special Purpose Combined Statements of Operations – Obligated
Group
Statistical and Other Data
15
17
18
20
21
MANAGEMENT’S DISCUSSION OF FINANCIAL PERFORMANCE
As of and for the years ended December 31, 2014 and 2013
Indiana University Health, Inc. and subsidiaries
Management’s Discussion of Financial Performance
The financial-statement information and other data as of December 31, 2014 and
December 31, 2013 and for the years then ended are derived from the audited consolidated
financial statements and other records of Indiana University Health, Inc. (Indiana
University Health) and subsidiaries (collectively referred to herein as the Indiana
University Health System). The consolidated financial statements include all adjustments,
consisting of normal recurring and other accruals, which management of the Indiana
University Health System considers necessary for a fair presentation of financial position,
results of operations and changes in net assets, and cash flows for these periods in
conformity with generally accepted accounting principles (GAAP) in the United States.
The financial data relating to the Obligated Group and the Obligated Group and Affiliates,
as defined in the Indiana University Health Obligated Group Master Trust Indenture, as
amended, is provided as supplementary information.
The accompanying financial-statement information should be read in conjunction
with the audited consolidated financial statements and the notes thereto of Indiana
University Health and subsidiaries as of and for the years ended December 31, 2014 and
2013 (not included herein).
Nature of Operations
The principal operating activities of the Indiana University Health System are
conducted at owned facilities or majority-owned or controlled subsidiaries and consist of
the following:
Downtown Hospitals of the Academic Health Center (Hospital Campuses) –
Consist of three acute, tertiary and quaternary care, and diagnostic facilities, licensed as
a single hospital, which constitutes the principal hospital activities of the academic
health center and whose operations are located in the downtown area of Indianapolis,
Indiana. These three hospitals, Indiana University Health Methodist Hospital
(Methodist Hospital), Indiana University Health University Hospital (University
Hospital), and Riley Hospital for Children at Indiana University Health (Riley
Hospital) are located on or near the campus of Indiana University-Purdue University in
Indianapolis and the Indiana University School of Medicine (the School of Medicine).
Central Indiana Facilities (Indiana University Health West Hospital (West),
Indiana University Health North Hospital (North), Indiana University Health
Tipton Hospital (Tipton), Indiana University Health Saxony Hospital (Saxony),
and Rehabilitation Hospital of Indiana (RHI)) – Consist of three acute care
hospitals, a critical access hospital, and an acute care rehabilitation hospital located in
the western and northern suburban areas of metropolitan Indianapolis, Indiana. Saxony
operates as a division of the academic health center.
1
Statewide Facilities – Consist of acute care hospitals and health care systems located
in Bedford, Bloomington, Goshen, Hartford City, Knox, Lafayette, LaPorte,
Martinsville, Monticello, Muncie, and Paoli, Indiana. Principal hospital subsidiaries
include Indiana University Health Bedford Hospital (Bedford), Indiana University
Health Arnett Hospital (Arnett), Indiana University Health LaPorte Hospital and
subsidiaries (La Porte) including Indiana University Health Starke (Starke), Indiana
University Health Goshen and subsidiaries (Goshen), Indiana University Health Ball
Memorial Hospital and subsidiaries (Ball Memorial) including Indiana University
Health Blackford (Blackford), Indiana University Health Bloomington Hospital and
subsidiaries (Bloomington) including Indiana University Health Paoli (Paoli), Indiana
University Health Morgan Hospital (Morgan), and Indiana University Health White
Memorial Hospital (White).
Physician Operations – Consist of physician offices and physician-group practices
and clinics. Principal subsidiaries or divisions include Indiana University Health
Physicians (IUHP), a nonprofit organization with locations primarily in Indianapolis,
Indiana, as well as Indiana University Health Arnett Physicians, Indiana University
Health Ball Memorial Physicians, Indiana University Health Southern Indiana
Physicians, Indiana University Health La Porte Physicians, Indiana University Health
Goshen Physicians, and Indiana University Health Transplant Institute.
Ambulatory Care – Consists of personal and home health care services, outpatient
oncology services and outpatient surgery centers, which are located throughout the
state of Indiana. Principal subsidiaries or divisions include Indiana University Health
Home Care, Central Indiana Cancer Centers, and seven joint venture surgery centers.
Medical Risk – Consists of the medical management of health care services of
members whose health care coverage is provided by the managed care networks of the
Indiana University Health System.
Foundations - Indiana University Health is the sole corporate member of Methodist
Health Foundation, Inc. (Methodist Health Foundation), which aids and supports
Methodist Hospital and other programs and areas of Indiana University Health. Tipton
is the sole corporate member of Tipton County Health Care Foundation, Inc. (Tipton
Foundation), which aids in carrying out the mission of Tipton. Ball Memorial is the
sole corporate member of Indiana University Health Ball Memorial Hospital
Foundation (BMH Foundation), which aids in carrying out the mission of Ball
Memorial. Morgan is the sole corporate member of Indiana University Health Morgan
Hospital Foundation (Morgan Foundation), which aids and supports Morgan. Indiana
University Health Arnett Foundation aids and supports Arnett. RHI is the sole
corporate member of Rehabilitation Hospital Foundation (RHI Foundation), which aids
and supports RHI. Goshen is the sole corporate member of IU Health Goshen
Foundation (Goshen Foundation), which aids and supports Goshen. Paoli is the sole
corporate member of IU Health Paoli Hospital Foundation (Paoli Foundation), which
2
aids and supports Paoli.
Revenue. Total operating revenue of $5,726.6 million for the year ended December
31, 2014 increased 9.1% (or $479.7 million) over the prior year ($5,246.9 million).
Net patient service revenue, when excluding state disproportionate share revenue
(DSH), upper payment limit reimbursement (UPL), and increased reimbursement related to
the Medicaid Assessment Fee program, increased by $95.4 million for the year ended
December 31, 2014 over the prior year, which reflects increased physician office visits,
improved collection efforts and a shift from self-pay to government payors. These
increases were partially offset by a decline in admissions (see table below), although
improvement was experienced late in the fourth quarter of 2014, as well as a cost report
appeals settlement of $6.4 million for 2000 through 2003. Management believes the
declines in inpatient volumes and related revenues are a reflection of the current industrywide trends in which health care systems across the nation are experiencing shifts from
inpatient to outpatient as well as declining inpatient utilization.
The table below shows admissions by division.
The Indiana General Assembly approved a hospital assessment fee program
(Medicaid Assessment Fee). Under this program, the Office of Medicaid Policy and
Planning (OMPP) collects a fee from eligible hospitals. The fee is used in part to increase
reimbursement to eligible hospitals for services provided in both fee-for-service and
managed care programs, and as the state share of DSH payments. The program was
initially effective for state fiscal years 2011 through 2013. On March 21, 2014, the
Centers for Medicare and Medicaid Services approved the extension of the program for
another four years. This approval reinstated the program retroactively to July 1, 2013. The
Indiana University Health System recorded the increased revenue related to claims
occurring after July 1, 2013 in the first quarter of 2014. As of December 31, 2014,
increased reimbursement related to the Medicaid Assessment Fee program totaled $514.7
million, of which approximately $166.7 million related to 2013. As of December 31,
2013, increased reimbursement related to the Medicaid Assessment Fee program totaled
$176.2 million, of which $9.6 million related to 2012.
As of December 31, 2014, $32.7 million of DSH and UPL revenue was recognized,
compared to $93.1 million for the prior year. The amount of state DSH and UPL funds
vary by year and the amount to be received in future periods cannot be guaranteed.
The provision for uncollectible patient accounts amounted to $299.3 million for the
3
year ended December 31, 2014 and $343.1 million in the prior year. As a percentage of
gross patient revenue, the provision for uncollectible patient accounts was 2.1% in 2014
and 2.5% in 2013.
Member premium revenue aggregated $259.8 million for the year ended December
31, 2014 and $156.6 million for the prior year. The increase of $103.2 million relates to
more members in both Medicaid and Medicare programs and additional premium revenue
related to a new health exchange-related insurance product introduced under the
Affordable Care Act.
Other operating revenue of $208.4 million for the year ended December 31, 2014
increased $3.0 million (or 1.5%) compared to the year ended December 31, 2013.
Expenses. Total operating expenses of $4,913.8 million increased by 0.8% compared
to the year ended December 31, 2013 ($4,873.3 million).
Salaries, wages, and benefits decreased 5.1% (or $134.0 million) to $2,501.6 million,
compared to the prior year. The decrease is mainly attributable to a decline in full time
equivalent (FTE) employees driven by lower inpatient volumes as well as lower costs for
the 2013 reduction-in-force than anticipated. As of December 31, 2014, the number of FTE
employees was 27,584, compared to 29,395 as of December 31, 2013.
Supplies, drugs, purchased services, and other expenses of $1,735.3 million decreased
0.9% ($15.6 million) compared to the prior year ($1,750.9 million) driven by lower
inpatient volumes.
Fees related to the Medicaid Assessment Fee program were $198.0 million for the
year ended December 31, 2014, compared to $82.4 million in the prior year. Of the $198.0
million in 2014, $72.9 million related to 2013, and of the $82.4 million in 2013, $11.6
million related to 2012.
Health claims to providers’ expenses of $171.0 million increased 81.0% over that for
the prior year ($94.4 million), which relates to more members in both Medicaid and
Medicare programs and the addition of a health exchange-related insurance product under
the Affordable Care Act.
Depreciation expense of $251.2 million increased 1.0% over that for the prior year
($248.8 million).
Interest expense of $56.6 million was 7.2% less than the prior year ($61.0 million)
due in part to a decline in outstanding indebtedness.
Other. For the years ended December 31, 2014 and 2013, Indiana University Health
expensed $17.5 million, respectively, and $50.0 million, related to educational and
research support provided to the Indiana University School of Medicine.
Investment income amounted to $38.8 million for the year ended December 31, 2014,
including $45.4 million of interest and dividend income and $33.8 million of realized gains
4
on investments, net of fees, and $40.4 million of unrealized losses on investments. For the
year ended December 31, 2013, investment income aggregated $191.1 million, which
included $35.4 million of interest and dividend income and $82.9 million of realized gains
on investments, net of fees, and $72.8 million of unrealized gains on investments. Losses
on interest rate swaps aggregated $21.9 million for the year ended December 31, 2014, and
gains aggregated $11.4 million for the year ended December 31, 2013.
The improvement in operating performance was primarily driven by recognizing 18
months of net increased reimbursement related to the Medicaid Assessment Fee program
in the year ended December 31, 2014, as compared to six months in the year ended
December 31, 2013. Additionally, as the healthcare landscape continues to change,
management has taken many steps to ensure the Indiana University Health System can
continue to provide a top level of care to patients into the future, including the
implementation of cost savings in 2014 in anticipation of actual reductions to the Medicaid
Assessment Fee program and possible reductions to state DSH and UPL, as well as other
forms of reimbursement. Moreover, management has taken these actions as they anticipate
and plan for significant capital expenditures within the next few years.
Consolidated Balance Sheet (Compared to year ended December 31, 2013)
Consolidated Financial Position. Total cash and investments (which principally
consist of cash and cash equivalents, board-designated funds and other investments, donorrestricted funds, and trustee-held funds for construction and debt service) amounted to
$3,718.4 million at December 31, 2014 ($3,071.9 million at December 31, 2013). The
number of days cash and investments on hand was 304 days at December 31, 2014 (247
days as of December 31, 2013) and excludes fees associated with the Medicaid
Assessment Fee program when determining cash expense per day. The number of days
revenue in receivables was 51 days at December 31, 2014 (excluding the increased
reimbursement under the Medicaid Assessment Fee program and related receivable), and
49 days at December 31, 2013. The number of days expenses in accounts payable, accrued
expenses, and certain other current liabilities (excluding fees associated with the Medicaid
Assessment Fee program and related liability) was 57 days at December 31, 2014, and 58
days at December 31, 2013.
Net current assets, or working capital, increased to $549.7 million at December 31,
2014 ($342.7 million at December 31, 2013), which was partially driven by the net
increased reimbursement received under the Medicaid Assessment fee program. Net
property and equipment of $2,700.8 million decreased $68.2 million from December 31,
2013 reflecting depreciation expense for the period, partially offset by continued
investment in facilities and equipment. Other amounts for property and equipment are
anticipated to be incurred and total approximately $119.4 million at December 31, 2014.
However these amounts may not be legally required or committed, and are subject to
change by authorization of the Board of Directors. These amounts are expected to be
financed through operations, contributions, and, where applicable, proceeds from the
issuance of tax-exempt bonds.
Indiana University Health has executed direct-pay letter-of-credit agreements in
support of all of its publicly remarketed variable-rate bond series, which require the credit
5
provider to purchase bonds in the event the bonds are not remarketed. In addition, it has
executed direct purchase agreements, whereby the credit provider purchases bonds for a
predetermined period of time, after which the agreement must be extended or the bonds
must be remarketed or reissued. In each of these two instances, the bonds have a longer
nominal maturity than the agreement, but the existence and terms of these agreements
allow for the long-term classification of the associated variable-rate bond series. Two such
agreements expire during 2015. If not otherwise extended, these agreements would require
the principal balance of the related bonds to be repaid over a shortened timeframe.
Accordingly, $31.9 million has been reclassified to current portion of long-term debt to
reflect the associated amount for 2015.
On April 1, 2013, the Ball Memorial redeemed at par ($5.5 million) all of the
outstanding Hospital Authority of Delaware County Hospital Revenue Refunding Bonds,
Series 1997. These bonds carried a fixed interest rate of 5.00%.
The Stonehenge Community Development VII, LLC, Fixed Rate, Unsecured New
Market Tax Credit Notes A and B were called by the lender for a one-time payment of
$18.7 million in March of 2014. This transaction resulted in a $6.3 million gain on
extinguishment of debt included in gains on sales and acquisitions and other in the
accompanying consolidated statements of operations and changes in net assets.
In June of 2014, a direct bank loan (the proceeds of which were used to redeem Series
2003F bonds in 2008) was amended to defer the maturity date to June 30, 2016, with an
interest rate based on one-month London Interbank Offered Rate (LIBOR).
In August of 2014, Indiana University Health repaid the outstanding balance of $11.9
million and prepayment premium associated with a commercial bank loan, resulting in a
$0.2 million loss on extinguishment of debt.
In August of 2014, through the Indiana Finance Authority, Indiana University Health
reissued its Series 2011H and Series 2011I bonds. The transaction was accounted for as a
modification of debt. As part of the reissuance, the rate calculation methodology for each
was amended resulting in a reduction to the rate applicable to each; the principal payment
schedule was amended; and the bank purchase period was extended to November of 2017.
On October 14, 2014, through the Indiana Finance Authority, Indiana University
Health issued at par $69.9 million of Series 2014A tax-exempt fixed rate bonds at a
premium of $10.8 million. Proceeds were used to advance refund the Hospital Authority
of Delaware County Hospital Revenue Bonds, Series 2006 (Ball Memorial Hospital, Inc.
Obligated Group F/K/A Cardinal Health System Obligated Group) outstanding in the
amount of $67.1 million; to advance refund the Hospital Authority of Delaware County
Hospital Revenue Refunding Bonds, Series 2009A (Ball Memorial Hospital, Inc.
Obligated Group) outstanding in the amount of $14.0 million; and to pay certain expenses
related to the issuance. The refinancing was accounted for as a debt extinguishment,
resulting in a loss of $8.3 million based upon the funds expended in excess of the carrying
values associated with the refunded debt.
6
Indiana University Health is evaluating a refunding of all or a portion of its Indiana
Health and Educational Facility Financing Authority Hospital Revenue Bonds, Series
2006A, all or a portion of the Indiana Finance Authority Taxable Hospital Revenue Bonds,
Series 2011J and 2011K, and all or a portion of the direct bank loan which was used to
redeem the Series 2003F bonds in 2008. Each refunding is dependent on the issuance of
one or more series of fixed and/or variable refunding bonds and market and other
conditions, and there is no assurance that all or any outstanding debt will be refunded or
redeemed or that refunding bonds will be issued. Management of Indiana University
Health presently expects that, if one or more of these refunding transactions transpires, the
transactions will close in the second quarter of 2015.
Unrestricted net assets, or equity, amounted to $4,650.8 million at December 31,
2014 ($3,983.3 million at December 31, 2013) and includes the net unrealized losses on
swaps of $145.3 million and $139.1 million at December 31, 2014 and December 31,
2013, respectively.
Strategic Initiatives
As part of its commitment to being a leader in both the treatment of patients with
complex illnesses as well as in the transition from payment models that reward volumes to
those that reward value, the Indiana University Health System continuously evaluates its
operations with goals to achieve superior clinical outcomes and to treat patients in the most
beneficial and least resource-intensive settings possible as it works to effectively manage
the health of populations.
As part of this continual evaluation, management engages in discussions at times
with unaffiliated third parties regarding potential affiliations, acquisitions, dispositions,
divestitures, joint ventures and other transactions. In addition, management considers the
potential to change the services offered at a given facility or consolidate and/or eliminate
redundant services. Such changes could be material, impacting the future composition of
the system.
As an example of developing new models of care for hospitals in smaller
communities, effective April 1, 2015, Morgan will convert to an outpatient care facility
and cease admitting overnight patients. The facility will offer a 24-hour emergency room
in addition to a range of outpatient procedures and services.
In order to remain at the forefront of the shifting health care environment, the Indiana
University Health Board of Directors recently adopted a five year strategic plan, which is
currently in the early stages of implementation. Some key decisions embedded within the
strategic plan include further expansion of Indiana University Health Plans; increasing
capabilities to manage the health of populations; simplification and focused realignment of
organizational and governance structures; various strategies centered on employment and
alignment of physicians; expansion of the Riley Hospital brand for pediatric care; and
7
improving primary care capabilities.
After considerable strategic planning, Indiana University Health and La Porte are
presently seeking a partnership with a new or additional healthcare organization for La
Porte. Both organizations presently anticipate that, as part of this new partnership, Indiana
University Health will likely cease to be the majority member of La Porte. Prior to any
such change in control, Indiana University Health anticipates that La Porte will withdraw
from the Obligated Group. In 2014, La Porte represented approximately 5.4% of the total
operating revenues of the Credit Group and La Porte and subsidiaries, including Starke,
together represented approximately 3.9% of the total operating revenues of Indiana
University Health System for the year-end December 31, 2014.
In concert with its primary care strategy, in 2015 and 2016, Indiana University Health
expects to open up to 12 urgent care clinics across central Indiana to offer fast, convenient
treatment outside of traditional business hours. Management expects the new clinics to be
owned by an anticipated joint venture with Premier Health, based in Baton Rouge, LA,
who will also serve as the manager of the clinics.
Adjusted Operating Income
The following table adjusts operating income for significant one time transactions or
significant items that relate to prior years. Management uses these measures internally for
planning, forecasting, and evaluating the performance of the Indiana University Health
System. The table also removes operating income attributable to noncontrolling interests,
which primarily relates to ambulatory surgery centers in which third parties hold
significant noncontrolling interests. Internally, management reviews operating results after
allocation to noncontrolling interests, in part, because a significant portion of the operating
results of these entities is distributed to the noncontrolling interest holders each period.
Non-GAAP measures should be considered in addition to, not as a substitute for, or as
superior to, measures of financial performance prepared in accordance with GAAP. For
additional information on the programs that resulted in these adjustments and on
noncontrolling interests refer to the audited consolidated financial statements and the notes
thereto of Indiana University Health and subsidiaries as of and for the years ended
December 31, 2014 and 2013.
8
Operating income as reported
Noncontrolling interests in subsidiaries
Medicaid assessment fee program, net
DSH
UPL
Medicare cost report appeal settlements
Grants to School of Medicine
Operating income adjusted
Operating margin adjusted
$
$
Years Ended
December 31
(in millions)
2014
2013
$
323.6
795.3
(92.8)
(90.2)
2.0
(93.8)
(11.5)
(8.5)
3.0
(6.4)
40.0
$
252.8
607.9
5.0%
11.5%

During 2014, net increased reimbursement under the Medicaid Assessment Fee
program was received for 2013 claims. During 2013, adjustments were made to the
Medicaid Assessment Fee program related to 2012.

During 2013, DSH was received for state fiscal years 2012 and 2011.

During 2014, an adjustment was made to UPL expected to be received for state
fiscal year 2013. During 2013, UPL was recognized for state fiscal years 2010
through 2012.

During 2014, Medicare cost report appeal settlements for 2000-2003 were
recognized.

During 2013, research grants were expensed.
9
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets
(Thousands of Dollars)
Assets
Current assets:
Cash and cash equivalents
Patient accounts receivable, less allowance
for uncollectible accounts of $197,120 and
$270,743 in 2014 and 2013, respectively
Other receivables
Prepaid expenses
Inventories
Current portion of trustee-held funds
Total current assets
December 31
2014
(Audited)
December 31
2013
(Audited)
$
$
Assets limited as to use:
Board-designated investment funds and other investments
Donor-restricted investment funds
Trustee-held funds for construction
and debt service, less current portion
Total assets limited as to use, less current portion
Property and equipment:
Cost of property and equipment in service
Less accumulated depreciation
Construction-in-progress
Total property and equipment, net
Other assets:
Equity interest in unconsolidated subsidiaries
Interest in net assets of foundations
Unamortized bond issuance costs
Goodwill, intangibles, and other assets
Total other assets
Total assets
$
527,682
442,672
684,108
150,264
48,577
75,355
1,485,986
659,402
126,552
39,341
75,340
114
1,343,421
3,113,805
76,887
2,524,831
94,057
3,190,692
10,242
2,629,130
5,845,564
(3,177,729)
2,667,835
32,997
2,700,832
5,690,685
(3,036,691)
2,653,994
115,053
2,769,047
49,202
13,976
6,116
219,981
289,275
7,666,785
44,578
13,849
6,659
244,390
309,476
7,051,074
$
Continued on next page.
10
Consolidated Balance Sheets (continued)
Liabilities and net assets
Current liabilities:
Accounts payable and accrued expenses
Accrued salaries, wages, and related liabilities
Accrued health claims
Estimated third-party payor allowances
Current portion of long-term debt
Total current liabilities
December 31
2014
(Audited)
$
400,269
293,112
56,469
107,679
78,757
936,286
December 31
2013
(Audited)
$
466,772
269,641
57,684
90,467
116,149
1,000,713
Noncurrent liabilities:
Long-term debt, less current portion
Interest rate swaps
Accrued pension obligations
Accrued medical malpractice claims
Other
Total noncurrent liabilities
Total liabilities
1,618,812
145,339
96,211
63,663
57,496
1,981,521
2,917,807
1,682,649
139,072
23,992
61,438
51,785
1,958,936
2,959,649
Net assets:
Indiana University Health
Noncontrolling interest in subsidiaries
Total unrestricted
Temporarily restricted
Permanently restricted
Total net assets
4,464,244
186,587
4,650,831
30,905
67,242
4,748,978
3,802,631
180,680
3,983,311
41,554
66,560
4,091,425
Total liabilities and net assets
$
7,666,785
$
7,051,074
11
Consolidated Statements of Operations and Changes in Net Assets
Year Ended
December 31
2014
2013
(Audited)
Revenues:
Patient service revenue (net of contractuals and discounts)
Provision for uncollectible accounts
Net patient service revenue
Member premium revenue
Other revenue
Total operating revenues
Expenses:
Salaries, wages, and benefits
Supplies, drugs, purchased services, and other
Hospital assessment fee
Health claims to providers
Depreciation and amortization
Interest
Total operating expenses
Operating income before educational and research support
Educational and research support to Indiana University
Total operating income
Nonoperating income (loss):
Investment income (loss), net
(Losses) gains on interest rate swaps, net
Inherent contribution of acquired entities
Gain on sales and acquisitions and other
Total nonoperating income (loss)
Consolidated excess of revenues over expenses
Less amounts attributable to noncontrolling interest
in subsidiaries
Excess of revenues over expenses attributable
to Indiana University Health and subsidiaries
$
5,557,672 $ 5,228,038
(299,255)
(343,136)
4,884,902
5,258,417
259,771
156,564
205,416
208,395
5,246,882
5,726,583
2,501,644
1,735,338
197,994
170,970
251,210
56,630
4,913,786
812,797
(17,500)
795,297
2,635,648
1,750,948
82,442
94,446
248,825
61,019
4,873,328
373,554
(50,000)
323,554
Three Months Ended
December 31
2014
2013
(Unaudited)
$
1,383,455 $ 1,340,099
(21,547)
(76,543)
1,263,556
1,361,908
39,956
79,592
46,430
52,116
1,349,942
1,493,616
641,506
479,067
20,230
57,502
65,573
14,099
1,277,977
215,639
(4,375)
211,264
665,114
460,278
14,472
19,319
59,758
15,448
1,234,389
115,553
(42,500)
73,053
38,755
(21,939)
2,665
926
20,407
815,704
191,083
11,379
–
14,815
217,277
540,831
(13,583)
(17,843)
(139)
(6,342)
(37,907)
173,357
83,863
960
–
461
85,284
158,337
90,175
92,846
29,827
31,693
725,529
447,985
143,530
126,644
12
Consolidated Statements of Operations and Changes in Net Assets (continued)
Unrestricted net assets:
Excess of revenues over expenses
Change in pension obligations
Contributions for capital expenditures
Distributions to noncontrolling interests
Sale of member interest to noncontrolling member
Restriction reclassification
Other
$
Temporarily restricted net assets
Change in beneficial interest in net assets of foundations
Contributions
Investment return
Net assets released from restrictions
Other
352
6,416
(1,049)
(9,670)
(2,698)
(4,000)
(10,649)
Permanently restricted net assets:
Contributions and other
Increase in net assets
Net assets at beginning of period
Net assets at end of period
Unrestricted net assets:
Change in pension obligations
Contributions for capital expenditures
Sale of member interest to noncontrolling member
Other
$
$
Temporarily restricted net assets
Contributions
Investment return
Net assets released from restrictions
Other
$
$
–
–
–
–
–
–
–
352
6,416
(1,049)
(9,670)
(2,698)
(4,000)
(10,649)
Year Ended
December 31
2013
(Audited)
Total
Controlling
Noncontrolling
540,831 $
447,985 $
92,846
86,055
–
86,055
8,142
8,142
–
(82,838)
–
(82,838)
–
–
–
2,000
2,000
–
2,286
504
1,782
556,476
544,686
11,790
642
4,341
3,252
(1,230)
(2,000)
–
5,005
–
–
–
–
–
–
–
642
4,341
3,252
(1,230)
(2,000)
–
5,005
428
254
682
428
254
682
–
–
–
52
244
296
52
244
296
–
–
–
657,553
651,646
5,907
561,777
549,987
11,790
4,091,425
4,748,978
$
3,910,745
4,562,391
$
180,680
186,587
$
Three Months Ended
December 31
2014
(Unaudited)
Total
Controlling
Noncontrolling
173,357 $
143,530 $
29,827
(72,149)
(72,149)
–
1,715
1,715
–
(21,623)
–
(21,623)
2,480
–
2,480
2,698
2,698
–
1,112
836
276
87,590
76,630
10,960
–
1,984
(863)
1,750
(2,698)
(1,300)
(1,127)
Permanently restricted net assets:
Contributions and other
Net assets at beginning of period
Net assets at end of period
Year Ended
December 31
2014
(Audited)
Total
Controlling
Noncontrolling
815,704 $
725,529 $
90,175
(72,149)
(72,149)
–
5,652
5,652
–
(92,026)
–
(92,026)
5,194
(834)
6,028
2,698
2,698
–
2,447
717
1,730
667,520
661,613
5,907
–
1,984
(863)
1,750
(2,698)
(1,300)
(1,127)
168,890
180,680
Three Months Ended
December 31
2013
(Unaudited)
Total
Controlling
Noncontrolling
158,337 $
126,644 $
31,693
86,055
86,055
–
3,765
3,765
–
(24,916)
–
(24,916)
–
–
–
2,000
2,000
–
1,844
1,081
763
227,085
219,545
7,540
–
–
–
–
(111)
82
(29)
(111)
82
(29)
–
–
–
86,530
75,570
10,960
$
$
145
1,299
3,363
664
(2,000)
–
3,471
–
–
–
4,486,821
4,562,391
3,360,758
3,910,745
145
1,299
3,363
664
(2,000)
–
3,471
10
57
67
$
$
–
–
–
–
–
–
–
10
57
67
4,662,448
4,748,978
3,529,648
4,091,425
175,627
186,587
230,527
$
3,860,898
4,091,425
–
–
222,987
$
3,687,758
3,910,745
7,540
$
173,140
180,680
13
Consolidated Statements of Cash Flows
Year Ended
December 31
2014
2013
(Audited)
Operating activities
Adjustments to reconcile increase in net assets to
net cash provided by operating activities:
Change in fair value of interest rate swaps
Change in pension liability
(Income) loss in unconsolidated subsidiaries
Provision for uncollected patient accounts
Inherent contribution of acquired entities
Gain on sale of clinics
Impairment of unconsolidated subsidiaries
Amortization of deferred gain on sale of
medical office buildings
Loss on extinguishment of debt
Increase in restricted net assets
Proceeds from the sale of member interest to
noncontrolling member
Trading securities
Net changes in operating assets and liabilities:
Patient accounts receivable
Other assets
Accounts payable, accrued liabilities, and other liabilities
Salaries, wages, and related liabilities
Net cash provided by operating activities
$
Investing activities
Proceeds from sale of clinics
Purchase of property and equipment, net of disposals
Net cash used in investing activities
Financing activities
Increase in restricted net assets
Repayments on long-term debt
Proceeds from issuance of long-term debt
Proceeds from the sale of members interest to
noncontrolling member
Net cash used in financing activities
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
$
657,553 $ 561,777
Three Months Ended
December 31
2014
2013
(Unaudited)
$
86,530
$ 230,527
6,267
72,149
(1,066)
299,255
(2,665)
–
2,073
251,210
(26,851)
(86,055)
(1,145)
343,136
–
(12,734)
10,134
248,825
14,016
72,149
(668)
21,547
139
–
2,073
65,573
(4,709)
(86,055)
492
76,543
–
97
10,134
59,758
(2,122)
2,313
(6,401)
(2,216)
–
(8,531)
(528)
8,370
(1,188)
(491)
–
(4,778)
(5,194)
92,026
(561,448)
–
82,838
(552,691)
(2,480)
21,623
(180,968)
–
24,916
(166,927)
(323,961)
(13,746)
(57,909)
23,471
17,212
449,017
(384,990)
26,635
40,936
(8,411)
(17,085)
213,572
(23,057)
(23,781)
42,327
62,601
(6,312)
157,966
(63,198)
(14,308)
82,400
45,389
(24,226)
165,564
–
(180,034)
(180,034)
13,050
(245,792)
(232,742)
–
(89,779)
(89,779)
–
(98,381)
(98,381)
6,401
(173,507)
69,965
8,531
(78,484)
3,003
1,188
(91,474)
69,945
4,778
(13,719)
–
5,194
(92,026)
(183,973)
–
(82,838)
(149,788)
2,480
(21,623)
(39,484)
–
(24,916)
(33,857)
85,010
(168,958)
28,703
33,326
498,979
$ 527,682
409,346
$ 442,672
442,672
611,630
527,682 $ 442,672
14
OTHER INFORMATION
Special Purpose Combined Balance Sheets - Obligated Group and Affiliates
Assets
Current assets:
Other receivables
Prepaid expenses
Inventories
December 31
December 31
2014
2013
(Unaudited)
$
Other assets:
Interest in net assets of foundations
Notes receivable and other (principally
from related organizations)
Total other assets
Total assets
471,300
396,375
79,141
37,623
49,047
1,033,486
$
2,683,191
2,111,562
3,972,586
(2,175,338)
1,797,248
13,304
1,810,552
3,841,011
(2,091,162)
1,749,849
107,874
1,857,723
242,256
8,753
5,882
$
356,123
375,881
81,470
26,015
50,362
889,851
705,409
962,300
6,489,529 $
232,556
8,734
5,561
644,783
891,634
5,750,770
15
Special Purpose Combined Balance Sheets - Obligated Group and Affiliates (continued)
December 31
December 31
2014
2013
(Unaudited)
$
1,036,307
139,107
53,577
37,755
77,140
1,343,886
$
758,576
133,383
54,595
19,401
107,984
1,073,939
Interest rate swaps
Other
Total liabilities
1,600,602
144,417
22,891
3,777
34,917
1,806,604
3,150,490
1,574,667
137,972
5,544
4,405
36,192
1,758,780
2,832,719
Net assets:
Unrestricted
Total net assets
3,324,345
2,795
11,899
3,339,039
6,489,529
2,900,030
6,532
11,489
2,918,051
5,750,770
$
$
16
Special Purpose Combined Statements of Operations - Obligated Group and Affiliates
Revenues:
Other revenue
$
Expenses:
Interest
Year Ended
December 31
2014
2013
(Unaudited)
2,921,677 $
2,716,579
(120,894)
(151,920)
2,800,783
2,564,659
230,377
144,215
291,668
271,389
3,322,828
2,980,263
1,128,013
1,167,239
101,940
185,295
160,690
51,689
2,794,866
527,962
(17,500)
510,462
$
57,012
(21,942)
10,094
45,164
555,626 $
Three Months Ended
December 31
2014
2013
(Unaudited)
$
703,808 $ 679,713
(27,526)
10,265
652,187
714,073
38,058
61,092
70,223
79,689
760,468
854,854
1,216,001
1,155,977
47,429
117,514
157,590
53,720
2,748,231
232,032
(50,000)
182,032
172,891
10,693
1,556
185,140
367,172
277,318
321,204
13,669
50,811
41,265
13,558
717,825
137,029
(4,375)
132,654
$
(9,770)
(17,896)
1,992
(25,674)
106,980 $
303,643
303,317
13,216
26,094
37,652
13,430
697,352
63,116
(42,500)
20,616
75,926
632
–
76,558
97,174
17
Special Purpose Combined Balance Sheets - Obligated Group
Assets
Current assets:
Other receivables
Prepaid expenses
Inventories
December 31 December 31
2014
2013
(Unaudited)
$
Other assets:
Interest in other assets
Notes receivable and other (principally
from related organizations)
Total other assets
Total assets
458,258 $
361,916
107,405
33,976
43,465
1,005,020
2,514,837
1,979,990
3,733,371
(2,040,821)
1,692,550
8,018
1,700,568
3,608,308
(1,962,616)
1,645,692
105,031
1,750,723
241,577
5,882
$
340,019
339,441
130,782
21,782
43,190
875,214
229,736
270
5,561
632,391
711,463
958,922
867,958
6,179,347 $ 5,473,885
18
Special Purpose Combined Balance Sheets - Obligated Group (continued)
December 31 December 31
2014
2013
(Unaudited)
$
1,025,562
124,109
53,577
34,733
76,836
1,314,817
$
749,773
116,732
54,595
16,237
105,729
1,043,066
Interest rate swaps
Other
Total liabilities
1,597,259
144,122
22,891
3,457
34,162
1,801,891
3,116,708
Net assets:
Unrestricted
Total net assets
2,666,852
3,057,751
4,000
4,891
4,888
2,675,743
3,062,639
6,179,347 $ 5,473,885
$
1,572,709
137,319
5,544
4,065
35,439
1,755,076
2,798,142
19
Special Purpose Combined Statements of Operations - Obligated Group
Revenues:
Other revenue
$
Expenses:
Interest
Year Ended
December 31
2014
2013
(Unaudited)
2,619,382 $ 2,422,734
(91,062)
(123,431)
2,528,320
2,299,303
230,377
144,215
277,968
256,186
3,036,665
2,699,704
1,003,302
1,055,169
92,179
185,596
148,739
51,506
2,536,491
500,174
(17,500)
482,674
$
51,008
(21,974)
10,094
39,128
521,802 $
Three Months Ended
December 31
2014
2013
(Unaudited)
608,337
$
627,604 $
(20,576)
18,547
587,761
646,151
38,058
61,092
65,986
75,956
691,805
783,199
1,087,170
1,049,818
43,321
117,690
144,750
53,451
2,496,200
203,504
(50,000)
153,504
160,058
10,371
1,556
171,985
325,489
245,865
290,474
13,269
50,877
38,214
13,531
652,230
130,969
(4,375)
126,594
$
(10,599)
(17,875)
1,992
(26,482)
100,112 $
271,229
275,085
12,580
26,148
34,383
13,359
632,784
59,021
(42,500)
16,521
72,709
546
–
73,255
89,776
20
Statistical and Other Data
As of and for the Three Months and Years Ended December 31, 2014 and 2013
(Except as noted below)
For the Year Ended
December 31,
2014
2013
Description
Methodist/IU/Riley/Saxony Medical Staff
Active Members
Residents
Other Members
Total Medical Staff
A-1-A
B
C
1,260
568
775
2,603
1,260
560
847
2,667
2,934
3,098
B-1-A
B
27,584
8,270
29,395
9,782
Obligated Group & Affiliates coverage of Debt Service (dollars in thousands,
annualized)
Revenues over expenses (1)
C-1-A
Depreciation, amortization and interest
B
Available to pay debt service
C
Actual debt service
D
Historical debt service coverage ratio
Forecast maximum annual debt service
E
Available to pay debt service
F
Forecast maximum annual debt service coverage ratio
596,132
212,379
808,511
133,090
6.07
130,044
808,511
6.22
286,670
211,310
497,980
116,894
4.26
148,012
497,980
3.36
Consolidated Number of Available Beds
Employees
Consolidated FTE employees
Methodist/IU/Riley/Saxony FTE employees
For the Three Months Ended
December 31,
Description
2014
Consolidated Utilization and Operating Statistics
Patient Days
Admissions
Occupancy Rate (based on available beds)
Average Length of Stay
Surgery Cases IP
Surgery Cases OP
Surgery Cases Total
Emergency Room Visits
Radiological Examinations
Gross Patient Service Revenue
Medicare
Medicaid
Commercial Insurance
HMO / PPO
Wellpoint / Anthem
Sagamore
Other
Self Pay and Other
Other Governmental
Total Gross Patient Service Revenue:
E-1-A
B
C
D
E
F
G
H
Medicare Case Mix Index, Methodist/IU/Riley/Saxony(2)
Bed Complement: Available
Medical Surgical
ICU / CCU
OB / Labor Delivery
Pediatrics
Psychiatric
Long-Term Care
High-Risk Nursery
Other Special Care
Total Bed Complement
F-1-A
B
C
D
E
F
G
2013
2014
167,586
33,206
62.09%
5.05
8,330
21,950
30,288
127,842
319,660
170,551
33,337
59.84%
5.12
8,526
22,479
31,005
122,574
290,919
39.57%
17.35%
2.56%
20.95%
0.61%
12.62%
4.01%
2.33%
100.00%
2.049
For the Year Ended
December 31,
2013
670,104
131,057
60.21%
5.11
32,709
80,789
113,499
498,522
1,222,784
702,510
136,731
57.97%
5.14
33,942
83,059
117,001
501,480
1,184,802
39.43%
17.65%
2.08%
39.91%
17.52%
3.16%
39.90%
17.67%
2.89%
20.64%
1.05%
12.43%
5.08%
1.64%
100.00%
19.51%
0.76%
11.95%
4.91%
2.28%
100.00%
19.41%
1.01%
11.99%
5.36%
1.77%
100.00%
2.091
2.062
B
C
D
E
F
G
2.110
December 31, 2014
Methodist / IU /
Other System
Riley / Saxony
Hospitals
759
1,169
193
144
26
121
169
69
23
52
93
71
45
1,263
1,671
H
I
J
K
L
M
N
December 31, 2013
Methodist / IU /
Other System
Riley / Saxony
Hospitals
776
1,047
216
170
65
186
181
71
40
79
100
102
65
1,380
1,718
(1) Adjusted for certain gains (losses) as defined in the IU Health Obligated Group Master Trust Indenture.
(2) Medicare system of classification for DRGs is annually revised effective October 1 of each year.
21

consolidated financial statements and other information

Transcription

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